It’s kind of blasphemous to say this time of year but there are some people who don’t need to be in a registered retirement savings plan.

In certain situations, contributing to an RRSP might make very little sense, especially when considering there are alternative uses for your money that will get you a better bang for your buck.

Number one you need to look at your current marginal tax rate and the expected marginal rate in retirement,” says Al Nagy, an Edmonton-based certified financial planner and regional director with Investors Group. “If someone right now is in a very low marginal rate, you may suggest to them to use a TFSA or a non-registered investment and take advantage [of an RRSP] in a year when they have a higher marginal tax rate. That way they are still saving and they can maximize that deduction when they can.”

Generally, he says, younger people tend to fall into the category of low earners but people closer to retirement not making a lot of money may also be a non-fit for RRSP contributions.

Mr. Nagy says you have to weigh it against other options and mentions a client working part-time and living at home with her parents.

“She’s making like $24,000 and probably will always live with her parents. Why would you do the RRSP, you look at a TFSA,” he says.

Another scenario that has consumers thinking about skipping their RRSP contribution is paying down debt, since it’s at an all-time high. Mr. Nagy suggests making your contribution and using the refund to pay down your debt.

“You can focus on wealth accumulation, tax deduction and paying down debt,” he says, adding the situation is different from client to client.

Perry Quinton, vice-president of marketing with the investor education fund, agrees RRSPs are not for everyone. “It’s fair to say that about any investment products. There’s a lot of marketing that says, ‘get your RRSP, get your RRSP’ but you have to stop and think before you go into it blindly,” she says.

Ms. Quinton notes the idea behind the introduction to RRSP was to get Canadians thinking about saving for retirement during their income years so they would have money during the lean times later in life. “It’s not the case for everyone,” she says.

Like others she says if you’re low income and likely to stay there, you probably don’t want to contribute to an RRSP. Seniors already in retirement contributing to an RRSP will get a tax deferral but the money might get withdrawn in a year where they took on an odd job which might result in claw back on guaranteed income supplements and old age security benefits, says Ms. Quinton.

A nice compromise scenario is to put the money into RRSP but don’t claim the deduction. The deduction can be carried forward indefinitely. “You use the deduction in future years where it will actually help you,” Ms. Quinton.

She notes business owners have options when it comes to paying themselves. They can compensate themselves in dividends or salary. They can leave money in the company. They can also create a different kind of individual pension plan.

A key scenario is if you need the money really soon, contributing it into an RRSP will limit flexibility. “You don’t often know about unemployment but if something’s coming up, TFSA is the better option.”

Author Talbot Stevens says even before the TFSA, you could get tax efficient on equity investments. “‘RRSPs have never really been a slam dunk. There is just a familiarity with the RRSP,” he says.

Mr. Stevens says the advantage to the RRSP is it is a retirement program. ‘The TFSA, you put it in on Tuesday and take it on Friday,” he says.